Photo op with ASEAN Summit participants

Photo op with ASEAN Summit participants

Meeting with President of the Philippines Rodrigo Duterte

13 November 2017

Signing of documents following the meeting

13 November 2017

Delegation heads from ASEAN economies and Dialogue Partners

Efforts to regulate international trade are still locked in an old paradigm
that dates back 40 years despite the rapid advances in e-commerce and digital
technology. There is persistent instability on the commodity markets, corporate
and public debt are adding up and so-called neo-protectionist policies are used
with increased frequency, making economic sanctions a competitive tool.

Russia is looking for ways to adapt to the new economic reality. We
succeeded in improving our national economy to some extent by adjusting its
development path slightly and reducing its excessive dependence on commodity
exports. This positive momentum became visible last year and into 2017. Growth
is recovering in Russia with GDP expected to increase 2 percent by the end of
the year.

This economic policy focuses on providing anti-crisis support to
high-potential industries and the banking sector. Some measures remain in place
even now, as is the free float of the national currency and inflation
targeting. We keep a close eye on the budget deficit in order to ensure that
the budget is balanced while the price of oil remains relatively low.

We are addressing structural imbalances, and there is positive momentum in
economic sectors that are not related to oil and gas. They benefit from
competitive advantages on the domestic market.

Russia currently has a trade surplus, and an opportunity to expand its
currency reserves. Against this backdrop, it makes perfect sense that foreign
investors are increasingly interested in Russian projects. In the first six
months of 2017, foreign direct investment increased by more than 100 percent.

We are facing the complex and challenging task of promoting international
cooperation in information technology, encouraging e-commerce and cross-border
business activity, while also ensuring national and information security.
Russia is ready to engage proactively in these efforts. In fact, we have
already adopted a special strategy for the development of an information
society and a programme on the digital economy.

For more than 20 years, Russia and ASEAN have cooperated in the special
framework of a dialogue partnership, focusing on trade and investment
promotion, although trade volumes remain quite modest.

We see genuine interest within the business community of our countries to
cooperate on energy, transport, agriculture, satellite navigation, high
technology, financial services, and in almost all possible areas.

From 2014 to 2017 alone, Russia sent high-profile business missions to
Indonesia, Malaysia, Singapore, Vietnam, Cambodia, Brunei-Darussalam, Myanmar
and the Philippines.

Russia is also ready to contribute to ASEAN initiatives to develop energy,
transport and information infrastructure. Offering the most efficient transport
routes is a priority for us. We are developing seaports and airport
infrastructure in Russia’s Far East and are building cross-border oil and gas
pipelines.

The main goal of all these efforts is to ensure maximum efficiency in cargo
transport between Asia and Europe and create a major transport and industrial
hub in Russia’s Far East to serve the Asia-Pacific Region.

More than 500 joint investment projects have already been launched in
Russia’s Far East. Only recently, we held the Eastern Economic Forum there,
during which contracts worth almost $50 billion were signed.

Having a large market with clear regulations and developed infrastructure
is a key prerequisite for business success. We wanted to create an environment
of this kind within a new integration body, the Eurasian Economic Union, which,
at this point, includes Russia and four other countries.

Together with our EAEU partners, Russia is interested in broad cooperation
with the ASEAN countries. The first full free trade agreement between the EAEU
countries and an ASEAN member state, Vietnam, came into force last year. We
have recently completed talks on a similar agreement with China, and there is
ongoing discussion of the creation of a multilateral free trade area between EAEU
and ASEAN. We are also conducting separate talks on this matter with specific
ASEAN countries.

Russia belongs to the Asia-Pacific Region in terms of its geopolitics,
history and economy. Promoting cooperation with all countries within the region
and contributing proactively to resolving regional issues is a strategic
priority for us.

Question: Russia has
achieved great success and a high level of competence in infrastructure
technology. What role can Russia play in accelerating the implementation of the
Master Plan on ASEAN Connectivity 2025 and strengthening
cooperation between Russia and our region in this regard?

Dmitry Medvedev: We
are willing to provide our infrastructure capacities to all ASEAN economies. This
includes airports and seaports, railways, roads, pipelines, powerlines and
high-speed communication channels.

These opportunities may be available with due account
for prospective cooperation, even more so because in the past years a wide
range of major infrastructure project have been completed.

We are currently preparing for the 2018 World Cup that
Russia will be hosting next year.

We also see great potential in developing the Northern
Sea Route. We have improved the major corridors in our country, including the Baikal-Amur
Mainline and the Trans-Siberian Railway that connect Europe and Asia. We also
continue to develop international transport corridors. All of our experience is
available to our ASEAN partners.

For example, Russian Railways is participating in a
large project to build complex infrastructure in Kalimantan (Borneo) in
Indonesia, including a new railway and a coal transport terminal.

There are examples of investment in Russian
infrastructure. In particular, Singapore’s Changi Airports International has
invested in the development of an air hub in Vladivostok.

Dmitry Medvedev: The ASEAN Economic Community is a partner with great potential and with a
substantial degree of regional integration.

Of course, there are many challenges for ASEAN countries, including drastic
gaps in socioeconomic development. There are difficulties in logistics and
transport. There is instability and increasing favouritism in the markets. All
these threats affect the ASEAN Economic Community as well. But I am certain it
is possible to mitigate these.

This is our idea of cooperation between Russia and ASEAN. The trade between
Russia and the ASEAN Economic Community is still rather low and remains under $15
billion a year. Trade has increased by one-third in the past year but the potential
is much higher, perhaps ten times greater.

Last year in May, the ASEAN-Russia
Summit in Sochi became a milestone in our relations with ASEAN. I hope
it will also give a strong impetus to building a strategic partnership between
our countries, the Eurasian Economic Union and the ten ASEAN economies.

Question: How can you
encourage Russian business people’s interest in Asia and Asian markets? What do
you think about inviting Asian companies to your country? What can you do to motivate
Asian businesses to expand into the Russian market?

Dmitry Medvedev: I think we are doing exactly that. Over the past few years, I have visited
Cambodia, Laos and Myanmar. Our business missions were also sent there. We will
organise visits by companies from all ASEAN economies, including the three
countries I just mentioned, to Russia.

Last year, ASEAN’s foreign trade exceeded $2.22 trillion. Russia’s
commercial relations are much more modest. The Russian Government is pushing
this type of contacts forwards but it is also important to develop direct
relationships between business representatives.

In October, Russia and ASEAN agreed on a plan of action in science,
technology and innovation. I hope that the business community will also find a
place in these plans. We have approved an energy development programme through
2020. There are programmes on agriculture, food security and tourism with ASEAN
economies. All these programmes can make an additional contribution to our
interaction.

It is very important that business contacts also expand. The Russia-ASEAN
Business Council that convened in May 2016 in Sochi, the ASEAN Business
Advisory Council, the Chamber of Commerce and Industry and business clubs in specific
countries – all these contacts will be encouraged by the Russian Government and
by our public business association. I hope that it will give a new impetus to talks
on establishing a free trade framework.

We (by which I mean the Eurasian Economic Union, an association of five member
states) have so far only signed a free trade agreement with one ASEAN country,
Vietnam. However, we are working out terms with a number of other states in
Southeast Asia, including all of ASEAN, in general.

Question:
What is your roadmap for helping small businesses in Russia move up the value
chain to become medium and large enterprises?

Dmitry Medvedev: The ASEAN countries differ in terms of economic development. Some are
more developed, and some are less, and there is persistent poverty,
underdeveloped infrastructure, and issues with the development of education.

By working together, we can make our own contribution to resolving these matters,
primarily through joint business initiatives, as well as educational and humanitarian
initiatives and by seeking to help and support the ASEAN countries in general.

In the recent years, we have taken a number of measures designed to support
small business. According to our estimates, some 50 to 60 percent of Russia’s
population could be involved in projects undertaken by small businesses. So
far, this figure is much lower. In fact, only about 25 percent of our
population are involved in small entrepreneurship.

We have adopted several pieces of legislation to promote small business,
including tax benefits and deductions related to production equipment leasing
and to facilitating investment.

We also support small business by setting up government funds for carrying
out various projects in this area. A fund specifically designed to support
small businesses was recently created in Russia. It could benefit hundreds of
thousands of small enterprises.

What matters most is that the state and the Government make this a
priority.